Apple's Walmart Deal Will Effectively Kill Google's Android 35 comments
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Recently, Apple (AAPL) did not announce that they would be selling their iPhone at WalMart (WMT). In fact, the San Jose Mercury news said that a $99 4-GB version would be sold at the #1 retailer - before Christmas; and the leading rumor site for all things Apple countered with “only the $198 8-GB version will be available at WMT, and that would be after the 28th of Dec.”
Either way, this will significantly increase the number of people who desire to own an iPhone [or an iPod Touch]. Obviously, this is not aimed at expanding Apple’s presence in the business community [not aimed at the Blackberry market], but instead, Joe-6-Pack [or is that Joe the plumber?]. In the unfortunate event that the potential buyer just signed a contract with another cell carrier, they could be cross-sold an iPod Touch - at WalMart.
People who were intrigued by the Android platform - which Google (GOOG) tried to promote using "amateurish" videos on GoogTube knowing full well that they were competing with Apple's slick advertisement campaigns - watched the “Android Chronicles” in despair. They were appalled at the G1-Phone’s clunky feel, that it did not look as cool as the iPhone, and a not so significantly cheaper $179 price tag (albeit with only a one year contract with T-mobile, which has the sparsest network in the USA). These issues make it almost impossible for all - except the most die-hard Android fan - to like the G1-Phone.
There is a HUGE difference between AAPL’s iPhone effort and GOOG’s Android program. First AAPL’s iPhone/ipod Touch is not just a device. It is a hardware/software platform - with games, widgets, everything, and it performs pretty darned well as a phone. RIMM addresses the only chink in the iPhone armor - a secure e-mail platform that your employer’s IT department will support - meaning you cannot go crazy and visit some on-line store and download your favourite software - you can use whatever IT says you can. Android wants to be all things to all people. Sure, it is a powerful software [Linux based] platform, but GOOG has no control over what the devices look like or feel like, nor does it control the applications written for Android…
In other words, the Apple-WalMart deal will deliver a death blow to the still young G1-Phone/Android platform. Yet, GOOG could possibly be redeemed as an innovative device maker who can come up with something as cool as the iPhone/iPod Touch. Though the odds that something like a competition to the iPhone will emerge from the Android platform is very close to zero.
Actually, I figured this after I had written what I thought would be the last sentence of this article: The iPhone, and the G1-Phone have one thing in common - their CPU is an ARM-based core. Therein ends the similarities. In fact, I was looking for a pop in Arm’s stock when the G1-Phone was released…needless to say, it did not happen.
Disclosures: No positions in AAPL, RIMM, ARMH, GOOG, Deutsche Telekom, ATT, WalMart.
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This article has 35 comments:
On Dec 10 09:38 AM User 316700 wrote:
> Has Apple ever announced 10 million iPhones sold for 2008? In October,
> many people were talking about 10 million sold but there has never
> been any official word from Apple. And there are only three weeks
> to go before 2008 ends. One would expect Apple to make a big deal
> about that major milestone, touted as the company goal for the year
> by Jobs himself.
Further, in the latest issue of Consumer Reports, you will see all the cell carriers rated by thousands of consumers, and the T-Mobile service rates way higher than AT&T's service. AT&T and Sprint are right at the bottom of user satisfaction in every city. So I have no idea why the author is trashing T-Mo cell service. The data is otherwise.
The G1 is on track to sell 1 million units before the end of the year (projections before it came out were 600,000 units), even tho it was only released on Oct 22. It's a huge hit.
Get your facts straight before you publish articles.
In addition to that.. how many I phones did AT T sell the first couple of months.. not 1 millon.
Having been an ATT customer and now a TMobile customer. I'll take the G1 over the Iphone on the basis that G1 is a lot more useful. More companies are adopting it, so it will be standard issue in a few years.
But if all that were not enough, all things been equal I will stay away from ATT .... even paying them money is a challenge
This article is correct. All you google fanboys are seriously deluded. g-phone will be a minor historical footprint.
Selling at Walmart is brilliant because it puts the iPhone in the face of the buying public at the lowest socioeconomic level. Apple is missing this market in it's stores, which are only in the highest end malls. The volume of product going onto WMT's shelves alone is staggering. iPhone and iPod touches are selling by word of mouth, personal demonstration. You can't believe how easy it is to use and how much better than the 'competition'. Google phone is a geek-only toy with no market.
PC fanboys used to talk about their software base. Well? There is no base for Google in devices. Period. iPhone iPod is going stratospheric. There are apps for so many things, and they are very very affordable.
That's all you really need to know to use an iPhone.
It isn't really that hard - easier in fact than navigating the infernal software systems on most of today's handset makers.
On Dec 10 07:59 AM Philly Jim wrote:
> Um, Joe six-pack doesn't know how to use the i-Phone. They are simply
> getting ahead of the curve. Consumers are shunning more expensive
> outlets for a bargain. Something more interesting to keep an eye
> is in the drop in new subscribers of internet access plans for these
> smartphones. The prices will eventually have to come down for these
> services to be viable in this market.
I believe that Google had opportunity to compete in this space. They are a well-respected brand with huge mindshare among a wide age group. They are considered youthful and creative and have loads of money to spend.
That said, I'm going to suggest something that may seem like heresy to many: opening the platform to 3rd party hardware developers may have been a mistake. Yes, Google wants to dominate the market the way Microsoft did: licensing. Only they did one better by adopting a ad-based revenue stream. The problem is that cooperative effort products usually stink .. as the case with the G1 (and the ROKR before it). I expect that trend to continue.
The closed wall ecosystem that Apple embraces is working. It's working for the Mac, the iPhone, and iTunes. After billions of dollars of profit and millions of happy consumers I think it's time to agree on that. Like it or not, it's working.
Granted, the G1 costs less to own, has a keyboard, has copy/paste, has a removable battery. But hundreds of useful free apps for immediate download? Since when is hundreds better than thousands? And tethering - not officially means jack squat. You can unlock an iPhone, too - is that an advantage for the iPhone? As for T-Mobile hotspots, again not an advantage - AT&T hotspots (at least, those at Starbuck's) are included on the iPhone.
""I saw one side-by-side test online, and the G1 3G was faster than the iphone 3G."
Two things. First off, I saw something that indicated that the T-Mobile proxy does some image compression before sending pages down the pipe to the phone, which if true would obviously have a positive impact on web page download speeds. Secondly, which networks were they on? I read a comparison of the two from London, where the G1 runs on a faster 3G network. Not really a fair comparison, is it?
I've had T-Mobile and I've got AT&T and Sprint, and my wife has Verizon in the Washington DC area, and I can tell you that in many places the voice service of T and TMO are identical. I believe they share infrastructure. At my house, which is less than 10 miles from the White House, both AT&T and T-Mobile provide similarly terrible coverage, while Verizon and Sprint are fine.
I've had problems with the 3G coverage, even in downtown DC, where a call with both AT&T and Apple folks on the line showed that the AT&T network was at fault. I believe that as time goes by, it will be shown that AT&T was the root of almost all of the iPhone's problematic data speeds.
"The G1 is on track to sell 1 million units before the end of the year (projections before it came out were 600,000 units), even tho it was only released on Oct 22. It's a huge hit."
and then GVS wrote: "In addition to that.. how many I phones did AT T sell the first couple of months.. not 1 millon."
In the first 10 weeks, 1 million units makes "a huge hit," eh? Sales of 100,000/week defines "a huge hit." Okay. In the first 14 weeks of the iPhone 3G (between release and the Q4 conference call), it sold more than 5 million units. And that doesn't include the 2 million iPhones in the channel, which had been shipped to retailers but not yet sold to consumers. How many of the 1 million G1's will be in the channel as opposed to actually sold?
The iPhone's selling rate, over a comparable period, was at least 3.5x greater than the G1's - which is apparently a "huge hit." I guess the iPhone's a hyper-mongo-gigantic hit.
GVS continued: "Having been an ATT customer and now a TMobile customer. I'll take the G1 over the Iphone on the basis that G1 is a lot more useful. More companies are adopting it, so it will be standard issue in a few years."
Don't kid yourself. Without Exchange support, G1 is dead to business. Once they get that onboard, it will still be a tough sale against RIM, which has EXTREMELY attractive price points.
Instead, I'm talking primarily about the content distribution system. Because Apple has an end-to-end solution, the iTunes / App Stores blow away anything that RIM or Google have or will have in the near future.
This is the kind of system that locks in loyalty - and locks in future revenue. Not to mention future innovation. I mean, I don't even have an iPhone (I have an iPod Touch), but I have had 12 (!) system updates in just one year (the iPhone had gone through 3 additional ones before the iPod Touch was released), and only the major upgrades had a nominal charge - the other 10 updates: free (all updates have been free for iPhone users). Not to mention all of the apps I've downloaded - and the developer has updated - over the course of just the past few months since the App Store launched.
And don't even mention Windows Mobile! How long did it take to finally release their 6.0 version? And the next release, 6.1, wasn't until another year later. And now 7.0 has been pushed out to 2010 (although I guess a minor 6.5 upgrade is due ... about now ...)
And all of this staying current for me took no more effort than getting email - it is right there in iTunes, waiting for me. The system tells me when there is a system update or a new version of a 3rd party application - all I have to do is click the "download" button.
That's the thing about Apple's approach - it is ease-of-use-centric and strongly encourages customer loyalty. I mean, the iPod Touch is like a "gateway drug" for the iPhone - I'm sure many iPod Touch purchases are people who'd like an iPhone but are still under their current mobile provider's contract. The number of upgrades from iPod to iPhone would be an interesting metric...
On Dec 10 10:48 AM webrun wrote:
> Apple fanboy -- doesn't know what he is talking about. Both the G1
> and the iphone are great devices, but here are just a few of the
> advantages of the G1 over the iphone: The G1 is way less per month,
> has a full qwerty keyboard, copy and paste, a removeable battery,
> hundreds of useful FREE applications for immediate download. Tho
> not officially, you can successfully tether the G1, and T-Mobile
> Hotspots is included with the G1 data plan. I saw one side-by-side
> test online, and the G1 3G was faster than the iphone 3G.
>
> Further, in the latest issue of Consumer Reports, you will see all
> the cell carriers rated by thousands of consumers, and the T-Mobile
> service rates way higher than AT&T's service. AT&T and Sprint
> are right at the bottom of user satisfaction in every city. So I
> have no idea why the author is trashing T-Mo cell service. The data
> is otherwise.
>
> The G1 is on track to sell 1 million units before the end of the
> year (projections before it came out were 600,000 units), even tho
> it was only released on Oct 22. It's a huge hit.
>
> Get your facts straight before you publish articles.
I chose the G1 for a number of reasons -- prefer T-Mo over AT&T, much less cost per month, feature differences I mentioned, and so on.
It's the monthly cost that turns out to be the more important cost in figuring total cost of ownership over a two year contract than the initial cost of the phone. Here's an example of the cost for G1 service for us: My wife and I got two phones, a G1 and a regular phone, on a T-Mo family plan with 700 minutes for $59. Add $25 for G1 data plan + up to 400 text messages ($35 with unlimited text messages), and our cost for is $84 per month. I could be wrong, but I don't believe you can get one iphone with data plan for that cost. If cost does not matter to you, that is great, but to a lot of folks, it does. Plus, we just ordered T-Mo at Home VOIP to replace our landline, which will be just an additional $10 per month.
You all who say the G1 is clunky are wrong. If you use one every day, you find it fits comfortably in your hand, and is very user friendly. But hey, if you don't like it, that's fine.
As for someone's complaint that about only "hundreds" of free aps available for the G1. There are more aps coming out every day. The phone has only been out a month and a half. In a short time, there will be thousands of aps.
The complaints logged here that T-Mo service is worse than AT&T just do not fit the data. I subscribe to C. Reports, and year after year, AT&T is near the bottom. Those come from thousands of consumers filling out surveys about their experiences with their cell phone service. I give that some credence.
And lastly, those of you who say that the Android system will fade away are not reading the news much. Not only is the G1 a rousing success, but a number of phone manufacturers now are planning to come out with phones using the Android OS, to be released on carriers in both the US and abroad. Windows Mobile is likely dying, but Android is here to stay.
On Dec 10 11:38 AM vassar wrote:
> Consumer Reports surveys are not reliable as the surveys center around
> major cities. T-Mobile has major issues in more rural areas. Also,
> they do not report the difference between the 'best' and other levels
> in their reports, so 'bad' may not really be that bad so to speak.
Yep, you're wrong. My bare-bones iPhone plan (no text messaging, minimum number of minutes) is $70/mo - $40+$30.
"As for someone's complaint that about only "hundreds" of free aps available for the G1. There are more aps coming out every day. The phone has only been out a month and a half. In a short time, there will be thousands of aps."
That was me. I was ridiculing your listing of "hundreds of useful apps" as an advantage of the G1 over the iPhone.
"The complaints logged here that T-Mo service is worse than AT&T just do not fit the data. I subscribe to C. Reports, and year after year, AT&T is near the bottom. Those come from thousands of consumers filling out surveys about their experiences with their cell phone service. I give that some credence."
It's really not enough data. T-Mobile customers I think are more likely cheerleaders for their chosen provider; if you look in the CR scoring, the "readers' scores" are generally higher for T-Mobile than for AT&T, though the other question about the service, which are somewhat more quantitative, show the actual service to be pretty close.
My opinion is that the service is the pretty much the same in places that both serve, and that AT&T's service is much better in the many places T-Mobile doesn't cover.
You wish, Fanboy
Remember, they are the ones who made famous "the computer for the rest of us". The idea that Apple products are somehow elitist is just a Wintel fanboy fantasy.
They have often cost more than competitors (but not always), but that was because you were paying for greater quality and industrial design.
"Average folk" are willing to pay for quality (true quality, not just celebrity status) just as much as the "upper crust".
On Dec 10 07:38 PM Greg Skidmore wrote:
> I find this idea of selling in wmt curious. I think it risks alienating
> Apples cult like following. I remember reading Malcolm Gladwell's
> book Tipping Point and he discusses when Airwalk started selling
> their shoes in main stream dept. stores. Killed the brand immediately.
> What made Airwalks cool is you had to buy them in skate or bmx shops.
> Is apple going to make itself uncool by selling in wmt?
>
It will be interesting though, to see the iPhone brand morph into the "George" brand. I wonder if the iPhone carrying set will rush for the exits when their phone is no longer jewellery.
Plus - who is going into an Apple Store now ? MacGenius classes ? Really ? Is that why people go ?
On Dec 10 07:38 PM Greg Skidmore wrote:
> I find this idea of selling in wmt curious. I think it risks alienating
> Apples cult like following. I remember reading Malcolm Gladwell's
> book Tipping Point and he discusses when Airwalk started selling
> their shoes in main stream dept. stores. Killed the brand immediately.
> What made Airwalks cool is you had to buy them in skate or bmx shops.
> Is apple going to make itself uncool by selling in wmt?
>
My choice is the Palm Vodafone version with Windows Mobile 6 Standard Edition, with 3G capability but with no WiFi.
It is highly cost effective compared with the pricey i.Phone, and I have spare cash to buy another standby phone including 2 spare new batteries for the Palm and standby phone.
I am happy with my choice, and believe my next purchase is going to be another Palm with Windows Mobile or Google Android or Linux or Palm OS (with at least 3.5G and WiFi).
A lot have to do with personal preference and usage patterns. There is no point in having several hundreds of applications when the ordinary man in the street just require a suite of frequently ran applications. More programs for me assure more problems and data corruption including viruses, malware, system hang, trojan horses, compatibility issues etc. My philosophy is :: Simplify your life, smell the roses.
My choice is the Palm Vodafone version with Windows Mobile 6 Standard Edition, with 3G capability but with no WiFi.
It is highly cost effective compared with the pricey i.Phone, and I have spare cash to buy another standby phone including 2 spare new batteries for the Palm and standby phone.
I am happy with my choice, and believe my next purchase is going to be another Palm with Windows Mobile or Google Android or Linux or Palm OS (with at least 3.5G and WiFi).
A lot have to do with personal preference and usage patterns. There is no point in having several hundreds of applications when the ordinary man in the street just require a suite of frequently ran applications. More programs for me assure more problems and data corruption including viruses, malware, system hang, trojan horses, compatibility issues etc. My philosophy is :: Simplify your life, smell the roses.